Abstract
Effective strategic management requires analysis, decisions and actions by an organization to create and sustain competitive advantage. Good decisions are clearly desirable, but whether a decision is good or not is a judgement call, often after the fact, and is itself subject to bias. What is less open to debate is the process that leads to accuracy or quality decision-making. This requires not just access to available information but proper processing, interpretation and integration of that data. Consideration of multiple options and perspectives is critical at all stages and there are many reasons why people do not do that. Poor decisions come from ineffective information search, selective bias in processing the information, a lack of alternatives being considered, a failure to examine the risks of the preferred choice and a rush to judgement (Janis and Mann 1979). In short, the selection, interpretation and integration of information are biased.
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Nemeth, C.J. (2018). Psychological Basis of Quality Decision-Making. In: Augier, M., Teece, D.J. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-00772-8_510
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DOI: https://doi.org/10.1057/978-1-137-00772-8_510
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